2010 - Robust Mind

10 Ways Of Doing Without FDI

A STIR of sorts has been caused by the story that foreign direct investment (FDI) into the country for 2009 fell 81% to US$1.4bil (about RM4.5bil) from US$7.3bil (RM24bil).

But really it should not. If we want higher value-added, then labour-intensive industries are not our target. This is the area which many foreign investors like because they can get tremendous cost savings by using cheap labour in places like China, Vietnam etc.

If greater value-added is what we are after, then increasingly more investments have to be made in the services area – think tourism or education for instance. That does not necessarily need foreign investment – we can use local money.

How to Find Recession Proof Stocks

Credits to Nilus Mattive

Global shipping is grinding to a halt; consumers are hunkering down again; manufacturing measures are indicating a new slump in activity; and even China’s red-hot economy is now a bit less robust according to Beijing!

In short, now is the perfect time to revisit the areas of the stock market that traditionally hold up best when recessions strike. These are the very same areas that I’ve been emphasizing all along, even during the manic rally, and the very same groups of stocks that you should look at right now as storm clouds roll back over the economic landscape.

Market Outlook (July 5th - 9th)

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Current Trend : Uptrend

Support 1 : 1303

Support 2 : 1295

Interest Rate Increase Next Week?

Although Malaysia’s year-on-year (yoy) export growth of 21.9% to RM52.3bil in May fell below market expectations, economists are still positive on an interest rate increase next week.

Reuters poll of 13 economists had forecast May exports to rise by 25.7% from a year earlier. Exports in April had expanded 26.6% yoy.

Stock Watch (ALAM)

Company: Alam Maritim Resources Berhad

Industry: Oil & Gas

3yr Average ROE: 19.47%

5yr Average EPS Growth Rate: 33.26%

Market Outlook (June 28th - July 2nd)

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How to Fully Utilize Maybank ASB Loan

A few days ago, I came across a discussion about ASB loan offered by Maybank. Actually, I have heard about the loan before and it seems like a very good investment for those of you who don't have much capital (like me!) as you don't have to pay lump sum to get maximum dividend. However, I never thought that we can utilize this investment so that we only need to pay the installment for the first year only, and at the end of the tenure, you will get the full amount of the loan.

Market Outlook (June 21st - 25th)

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Stock Watch (TCHONG)

Company: Tan Chong Motor Holdings Bhd

Industry: Motor Vehicle

5yr Average ROE: 10.86%

10yr Average EPS Growth Rate: 20.45%

Market Outlook (June 14th - 18th)

10th Malaysia Plan; What Say You?

Last Friday, our beloved Prime Minister announced the RM230 billion package under the 10th Malaysia Plan (10MP) for the year 2011-2015. All the media masses seem to be supportive and believe that Malaysia, among others, can achieve 6% GDP growth per year until 2015 to match the targeted RM38,850 (USD 12,140) gross national income. Another point that I would like to highlight is that the government also aims to increase the private sector investment by 12.8% which is equivalent to RM115 billion per year.

Book Recommendation – I Love Stocks by Pauline Yong

This week, I would like to introduce a very good book to those of you who would like to start investing in the stock market.

Stock Watch (MAMEE)

Company: Mamee Double-Decker (M) Bhd

Industry: Food & Beverage

5yr Average ROE: 14.76%

10yr Average EPS Growth Rate: 25.4%

Market Outlook (June 7th - 11th)

Investing in a Bear Market

As we all realize, a couple of weeks ago our FBMKLCI plunged under the 200-day moving average which means that we are officially in a bear market. Even though the market went up a little last week, majority investors and analysts believe that the bear is not done yet.

How to Read a Financial Statement (Part 2)

Debt Equity Ratio or Gearing Ratio

Gearing ratio of a company will indicates how deep is the company with debt. Naturally, the lower the ratio, the better the company. If the company has a gearing ratio of 1, it means that the company has RM 1 debt for every RM 1 of it’s assets.

Market Outlook (May 31st - June 4th)

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How to Read a Financial Statement (Part 1)

Having discussed the basics of both fundamental and technical analysis strategies, I believe that the next step for the investors is to learn how to read financial statements of a company. By reading, I mean the investors should be able to understand not only the profit and loss of the company, but also other important info which are ‘hidden’ in the statement. By analyzing the statement, investors will be able to select and filter companies that have the most growth potential.

Fundamental Analysis versus Technical Analysis (Part 3)

Finally, I’ve got some time to finish what I had started on this issue of Fundamental and Technical Analysis.

As I have discussed in previous entries, both FA and TA methods have their own pros and cons in the world of investing. Personally, I believe that every investor should invest some of their time and money to gain substantial knowledge about these two different strategies. A wise investor who wants success should be able to use both strategies, complimenting each other and increase the likelihood of profitable trades. Read More!

Fundamental Analysis versus Technical Analysis (Part 2)

Technical Analysis (TA) investors are often mistaken as speculators or gamblers. In my humble opinion, speculators in the stock market are gamblers in the true sense where they buy and sell shares for no apparent reasons.
Read More!

Fundamental Analysis versus Technical Analysis (Part 1)

Fundamental Analysis (FA), is the oldest and the largest school of investments analysis. Benjamin Graham aka “the Father of Fundamental Investing” and his famous disciple, Warren Buffet are the most respected gurus of FA. They introduced the concept of value investing as opposed to speculation, a method adopted by the Technical Analysis (TA) investors.
Read More!

Book Recommendation - Stock Performance Guide by Dynaquest

Okay, this is a book that I would recommend to anyone who wants to be an investor to have. This book is like your Holy Book in the world of stock market investing. I really appreciate those at Dynaquest for their effort in compiling and publishing these data twice a year.

This book contains the info regarding every counter that is trading in the FTSE Bursa Malaysia, back dated up until ten years ago. You and me can skip the hassle to find historical data and analysis of any stock counter just by referring to this book. You can see for yourself, the vast information contained in this book by looking at the sample page here.

Besides, I just got the latest March 2010 edition today. I will be using it from now on as a reference for the past performance of the stock and hopefully it will help me in finding the 'gem' stocks. I also would like to suggest fellow investors to get a copy of this book as well, so that we can know what we are investing in. You can order the book online by going here.

In the next post, I will start discussing on the technicalities of Fundamental Analysis (FA), one of the two schools of stock market analysis, and the reasons why it is better than the other school of Technical Analysis (TA). Read More!

Bank Persatuan Malaysia Berhad – The Second Co-operative Bank in Malaysia

Koperasi Bank Persatuan Malaysia Berhad, also known as Bank Persatuan Malaysia Berhad, is a co-operative bank governed by Suruhanjaya Koperasi Malaysia under the Ministry of Domestic Trade, Co-operatives and Consumerism.

Bank Persatuan is now in the process to become the second co-operative bank in Malaysia after Bank Kerjasama Rakyat Berhad. As we all are aware, Bank Rakyat is very generous with its dividends to the members. Since the last 10 years, the dividend paid to the members are not less than 15%. But it is not open for membership anymore for the last five years.

Bank Persatuan on the other hand, paid an average of 10% dividend since the last 6 years to its members. I believe that it is a good return on investment compared to ASB (around 8%) and Fixed Deposit (around 3-4%). The membership is open for public from as little as RM 500 up to RM 10,000. For co-operatives, the limit is RM 50,000.

Since this bank is a 100% Syariah compliance, I don’t see any reason for any of us not to invest with this bank. Banking business is a very good business to invest in, and the returns are unmatchable. So, what are we waiting for? Click here to download the application form and submit it to the nearest branch around you. Read More!

-Capital- (Part 2)

I think my previous post is not explaining enough about capital. So, i decided to elaborate more about it in this post.

In investment world, there are actually 2 types of capital, one which we use our OWN money and the other one which we use OTHER PEOPLE'S money. Other people's money may include banker's money(loan) and also public's money(listed companies). It is the ultimate intention of any investor to be able to invest using other people's money and to reap profits without using their own money.

In fact, we can see in a lot of situations where it is possible to use other people's money for investments, especially in real estate investments where the investor only needs to put around 10% of his own money, and the bank will cover the rest. When the real estate is being rented, the owner(investor) will use other people's money(rental payment by tenants) to settle the loan repayment. Most of the investor also enjoy positive cash flow from it too, when the rental payment is higher than the monthly payment of the loan.

However, it is not advised for an investor in the stock market to follow this strategy, simply because it is a different ball game from real estate. The volatility and uncertainty of the market movement is simply too risky for any investor to use borrowed money in the stock market.

Stock market can move in either direction just within a short period of time. So, investors who 'gamble' in the stock market using other people's money will have a difficult time if their investment is not as profitable so as to settle the debt. During the last economic downturn, we see a lot of people got stuck in heavy debts because they use borrowed money to invest in the stock market. We even heard people committing suicides because of this.

Remember, it is the cardinal rule of stock investment not to invest using borrowed money. It will only bring more harm than benefit. Do not ever borrow money to invest. It's safer to use our own money, even if it takes a lot of time to accumulate our capital. I assure you, it's well worth it! Read More!

-Capital- (Part 1)

So, before starting any investment; be it stock market, real estate, unit trust and even business, an investor must first raise or set aside his capital for investment purposes.

I've heard countless times people said that,"Oh, he's from a rich family, no wonder got so many money to invest" or "My monthly allowance/salary is not enough to cover my expenses, how can I raise so much money for investments?". Rest assured, there is actually a simple solution for this.

SAVE.

Yes, the good old save.

But how?
Yeah, I can imagine how people react to the word save but most of us, including me, have a hard time implementing it. It's true that we are reluctant to part with our hard earned money, but bear in mind if we don't act now there will be no future where we are rich inside it.

I would suggest that every month when we receive our pay, firstly we should take away a portion of it (let's say 30%-40%) and set it aside as a capital for our investment. It may be hard at first, but after a few times it will be a habit. Once you have enough capital, you can start your own investment.

Money will take us only so far. But with strong urge of desire, passion and hunger for more, then only we can bring about to ourselves a better future, hopefully financially free!

Willkommen!

Greetings to all.
The purpose for this blog is for me to compile and post about investment vehicles, especially business, stock market and real estate, in Malaysia. It may also includes finance and economic issues as well as tips and guides that I find beneficial for me in order to make excessive money. Well, who don't want to be rich? :)

Be that as it may, feel free to comment and share your insights as we stroll along the path of wealth; may we find our success in this journey.

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